Makhteshim Agan Announces 1Q 2011 Financial Results
Agan Group (TASE: MAIN), the world leader in branded off-patent crop
protection solutions, today reported financial results for the 2011 first
quarter, ended
FINANCIAL HIGHLIGHTS
Below are key financial metrics for 1Q 11:
In millions of US$ 1Q 2011 1Q 2010 Change
Sales 780.5 723.1 8.0%
EBITDA 143.2 132.8 8.0%
Gross profit 255.5 232.9 9.7%
Gross margin 32.7% 32.2%
Operating profit 112.1 106.5 5.3%
Net income 91.7 70.9 29.4%
Mr.
“Fundamentals in our industry are recovering. Our growth and business
performance in the quarter were aided by stable weather in the Northern
Hemisphere and focused execution discipline across all regions. We are
pleased to see the significant progress made in our operational change plan
and that we were able to benefit from it already this quarter. On the
ChemChina business combination, ChemChina, Koor and we have made meaningful
progress towards closing the transaction in-line with the agreement and its
expected timeline.”
Mr.
financial results for the quarter are the outcome of significant actions
which we have taken over the last nine months, coupled with positive market
trends, as we currently see them.
Our operations benefited from the combination of a number of important
measures including: reconfiguring our organizational structure, changing our
global manufacturing and supply-chain operations and a major restructuring of
our Brazilian operation. At the same time, we strengthened our business in
the U.S. and established a platform for further growth in APAC& ME. We
remained focused on expanding our global network and product portfolio via
add-on acquisitions completing transactions in
the acquisition of an important product from DuPont which we completed this
quarter.
The completion of the ChemChina business combination, which also kept us
busy during 2010, is progressing according to the agreements’ timeline.” Mr.
Vigodman concluded.
BUSINESS COMBINATION WITH CHEMCHINA: UPDATE
On
with a subsidiary of the China National Chemical Corporation to carry out a
merger that will result in the Company becoming private under joint ownership
of ChemChina (60%) and Koor (40%). The Company’s shares shall be purchased at
a price that reflects a value of the Company of
for them will be in US dollars. Accordingly, the price per share is
prior to dilution in a negligible amount likely to be caused by the exercise
of employee options. On
has obtained all required regulatory approvals for the transaction. At the
same time, Koor announced that it is actively engaged in finalizing and
approving its loan agreement with a Chinese bank. The Company continues to
expect closing of the transaction in line with earlier indications.
Pursuant to the Immediate Report dated
application to the
controlling shareholder, Koor Industries Ltd (“Koor”) for the removal and
prevention of discrimination, and a petition to have it recognized as a class
action in accordance with the Class Actions Law, 2006, (together “the
Petition”) in respect of the merger agreement dated
subsidiary of the China National Agrochemical Corporation (“ChemChina”), Koor
and the Company. The Company reported on
was handed down by the court whereby Koor is not entitled to surplus
consideration in respect of the benefit of the non-recourse loan that Koor
was to have received as part of the Sales Transaction, and the value of said
consideration must be divided between all the Company’s shareholders – both
shareholders from among the public and Koor in respect of all its holdings in
the Company.
The court also ruled that there would be an additional hearing on the
Petition on
Koor has informed the Company that it is studying the said ruling and is
assessing the implications of the ruling and the steps it will take.
SALES
Fourth quarter 2011 sales were
million
contributor to sales growth was an increase in volumes sold as well as the
consolidation of new activities in Korea and
partially offset by exchange rates.
Below are sales for the 1Q 11 by geographic region:
Breakdown of Sales
Millions of US$ 1Q 2011 1Q 2010 % Change
Europe 388.9 372.5 4.4%
Latin America 113.5 116.6 (2.6%)
North America 126.9 119.6 6.1%
Asia Pacific & Africa 126.7 93.8 35.1%
Israel 24.5 20.6 19.1%
On a geographic basis, the strongest sales growth was in the Company’s
quarter year of 2011, a 35.1% increase from
2010. This improvement was due to an increase in sales volume, particularly
in
Sales in
million
reduction. Increased sales volume in
offset by continued implementation of
selective sales.
North American sales for 1Q 2011 amounted to
with
6.1%. Increased volumes were slightly offset by competitive pricing pressures
in some products.
European sales for the first quarter of 2011 were
compared with
year, an increase of 4.4%. The growth stemmed mainly from increased sales of
crop protection products in the region resulting from favorable weather
conditions.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
EBITDA during 1Q 2011 was
to
an 8.0% growth rate.
GROSS PROFIT
Gross profit for 1Q 2011 totaled
million
quarter was 32.7%, compared with 32.2% for the same period in 2010.
The growth both in gross profit and in gross margin during the first
quarter of 2011 was due to an increase in sales volume coupled with the
positive effect of the Company’s implementation of its organizational change
plan initiated in 2010. Also contributing to the positive results were an
improved product mix, as well as the sale of lower cost inventory compared to
inventory costs in the first quarter of 2010. This was partially offset by
the decline in average sales price.
OPERATING PROFIT
Operating profit for the first quarter of 2011 was
of sales) compared with a profit of
sales) in the same quarter of last year.
OPERATING EXPENSES
Operating expenses for the quarter totaled
sales), compared with
NET INCOME
Net income for the first three months of 2011 was
compares with
CASH FLOW
The Company recorded positive cash flow from operating activities of
flow from operating activities of
The improvement in cash flow from operations resulted mostly from improved
profitability in the quarter which was partially off-set by an increase in
operating expenses mainly driven by currency effect.
Free cash flows (excluding short-term investments) in the first quarter
of 2011 amounted to negative cash flow of
negative cash flows of
Declining cash flow during the quarter was attributable to an increase in
investing activities.
FINANCING EXPENSES
Financing expenses totaled
31, 2011
expenses in the quarter is mainly attributable to the appreciation of the
European currencies and the Brazilian real which was partially off-set by
increase in Israeli CPI. This decrease partially off-sets the increase in
operating expenses that was driven by currency effect.
Conference Call
Makhteshim Agan will host a conference call to discuss the Company’s Q1
2011 results, on Monday,
Conference ID: 64118831.
The call will be followed by a presentation which can be accessed through
the Company’s website at http://www.ma-industries.com. Following the
conclusion of the call, a replay of the call will be available within 24
hours at the Company’s website.
About Makhteshim Agan
Makhteshim Agan Industries, Ltd. (TASE: MAIN),
http://www.ma-industries.com, is a world-leading manufacturer and distributor
of branded off-patent crop protection products. With sales of
in 2010, MAI ranks seventh in global agrochemical companies, fourth in
knowhow, high-level technological-chemical abilities, expertise in product
registration, the observance of strict standards of environmental protection,
stringent quality control and global marketing and distribution channels. The
Company is well positioned to deliver effective and reliable solutions to
farmers globally.
Contact:
Rony Patishi-Chillim
Head of Global Corporate Communications
+972-73-232111
IR@ma-industries.com
SOURCE Makhteshim Agan Industries Ltd